Cities keeping part of Detroit Zoo tax; lawsuits likely

Wayne County communities have held back about $756,000 of the Detroit Zoo millage voters passed in 2008, diverting the money to special districts allowed to capture tax dollars to fund improvements like decorative street lights.

The districts, called Tax Increment Finance Authorities, which are often run by Downtown Development Authorities, have questionably siphoned a small portion of the 0.10-mill tax in 36 communities, including $157,700 just in Taylor.

Taxpayers in Oakland, Macomb and Wayne counties pay the zoo millage but the practice of holding back some of the revenue for TIFAs and DDAs has only occurred in Wayne County. While most of the communities stopped the practice, 16 communities continue, including Taylor, Grosse Pointe Park, Dearborn, Northville and Hamtramck.

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Detroit Zoo Director Ron Kagan wants all the communities to stop using zoo tax funds and repay what has been diverted back to the 125-acre park that sits in Royal Oak and Huntington Woods. The millage makes up about 40 percent of the budget of the zoo, which had 1.2 million visitors last year.

Legal threats are flying both ways as several of the Wayne County communities plan to defend taking some of the zoo millage. They argue DDAs are allowed to capture money from all taxing authorities but schools.

Taxpayer Bud Willette of Sterling Heights said he feels hoodwinked.

“That money was meant for the zoo, which needs it for animals and upkeep, but they’re using to put sidewalks in Trenton,” he said. “It makes me see red. I don’t trust anyone in Wayne County.”

Trenton kept $8,236 of the zoo tax from 2008-10 compared to $75,900 in Romulus, $51,600 in Van Buren Township, $50,100 in Wyandotte, $47,100 in Detroit, $45,000 in Brownstown Township, $37,300 in Dearborn Heights, and $28,700 in Grosse Ile Township. The money was spent on ornamental fences, sidewalks, brick pavers and a dog park.

Legal opinions vary as to whether the communities are allowed to hold back some of the zoo millage for their TIFAs and DDAs and if it can be done with the Detroit Institute of Arts millage passed last year.

Regardless of the outcome, Leon Drolet, director of the Michigan Taxpayers Alliance, said the zoo debate is another case of voters being misled at the ballot box.

“You expected lions, instead you get lying,” he said. “The problem is once the money leaves your pocket and goes to the government there’s no certainty it will go where it is supposed to.”

Drolet’s group is suing the Detroit Institute of Arts for continuing to charge fees for exhibits after a tri-county millage was passed to support the museum with tax dollars in exchange for free admission.

Oakland County Treasurer Andy Meisner, a former state representative, was chairman of the state House commerce committee that approved the ballot language for the zoo millage. He said during public hearings on the measure there was never discussion of the funds being captured by DDAs and TIFAs.

“You have to look at legislative intent,” he said. “I was there and there was no talk of that. Nobody likes to be misled. The language of the proposal didn’t say a tenth of a mill goes to the zoo minus what TIFAs capture; it says we give a tenth of a mill to the zoo. That’s how we’re doing it in Oakland County along with our friends in Macomb.”

Meisner also is treasurer of the Oakland County Zoological Authority that oversees collecting the zoo tax in that county. The authority collects and turns over almost $5 million for the zoo. The Macomb County Zoological Authority collects about $3.1 million and gives it the zoo.

Wayne County sent about $4 million to the zoo and held back about $111,400 in 2011. A fraction of the zoo tax was diverted to the 16 communities, ranging from $86 in Hamtramck to $35,200 in Taylor. Romulus held back $14,728, Dearborn and Dearborn Heights about $7,200 each, and Grosse Pointe Park $3,263.

The zoo’s director has threatened legal action against the Wayne County communities, which are planning their own lawsuit in defense of taking some of the zoo millage.

Meisner said he thinks the zoo will prevail.

“I think ultimately those cities will pay it back – maybe in installments – and stop collecting it going forward,” he said. “The bottom line is the zoo is really an economic development driver for the region and when people approved a zoo millage they did it to help fund a regional attraction.”

Meisner said he thinks the diversion of any zoo tax money is inappropriate but he understands why the communities want to defend their “creative’ interpretation of the law.

“TIFAs get funding based on increases in property values and when there’s no increase they starve,” he said. “I sympathize with TIFAs and DDAs in lean times. It’s not that they aren’t doing important work but this isn’t an appropriate source of funding for them.”

Two “informational letters” from the Michigan Attorney General’s Office issued in 2009 and 2011 state that the zoo millage can’t be captured by TIFAs, DDAs, corridor improvement authorities or brownfield redevelopment authorities.

The Wayne County Treasurer’s Office has pointed to those letters in warnings to all 43 Wayne County communities, which are collecting winter taxes due Feb. 15. Soon after that, it will be known which communities continue to capture part of the zoo tax.